Definition
The term accumulate is used to identify the stocks a sell-side analyst believes will perform slightly better than the overall market in the near term. Accumulate is considered a buy recommendation; although it is not considered vitally important for an investor to hold this security in a portfolio of stocks.
Explanation
Sell-side analysts are responsible for generating periodic research reports for their clients. These reports highlight recent company news, as well as projections of future earnings developed through the use of proprietary models. While these reports contain a lot of detail, they also contain a summary recommendation.
Analyst recommendations are not standardized, but they can be generalized. Accumulate is a buy recommendation, but not a strong one. Accumulate is the equivalent of recommendations such as: Long-Term Buy, Moderate Buy, Industry Outperform, Market Outperform, Overweight and Add. The analyst is essentially telling the investor the company's stock is expected to outperform the market over the next twelve to twenty-four months.
Related Terms
The term buy-side analyst refers to an individual that evaluates the future earnings and investment quality of companies on behalf of their clients. Buy-side analysts will normally work for hedge funds, pension plans, mutual funds, high net-worth individuals, and other types of non-brokerage investment firms.
Moneyzine EditorJanuary 9th, 2024- The term sell-side analyst refers to an individual that evaluates the future earnings and investment quality of companies on behalf of a brokerage firm. Sell-side analysts will normally specialize in following the companies in a specific industry.Moneyzine EditorSeptember 21st, 2023
The term hold is used to identify the stocks a sell-side analyst believes will neither outperform nor underperform the overall market in the near term. A hold rating is neither a bullish nor bearish recommendation, and is associated with a stock the analyst feels will provide a return roughly equal to the overall market's.Moneyzine EditorJanuary 19th, 2024- The term underperform is used to identify the stocks a sell-side analyst believes will disappoint investors relative to the overall market in the near term. An underperform rating is a bearish recommendation, and is associated with a stock the analyst feels investors should not add to their portfolio.Moneyzine EditorSeptember 21st, 2023
- The term strong buy is used to identify the stocks a sell-side analyst believes will significantly outperform the overall market in the near term. A strong buy is a bullish recommendation, and is associated with a stock the analyst feels their clients should hold in their portfolio.Moneyzine EditorSeptember 21st, 2023
- The term strong sell is used to identify the stocks a sell-side analyst believes will significantly underperform relative to the overall market in the near term. A strong sell rating is a bearish recommendation, and is associated with a stock the analyst feels investors should not have in their portfolio.Moneyzine EditorSeptember 21st, 2023
